Charlie Munger on the Dangerous Paul Krugman

At a shareholders meeting for the Daily Journal, billionaire and long-time Warren Buffett partner, Charlie Munger, who is chairman of DJ, answered shareholder questions during the meeting. As part of one answer, he brought up Paul Krugman and said:

Somebody like Paul Krugman, who's overdosed on mathematics, and uses the king's English better than practically anybody alive, so he's very dangerous. He just thinks there's no limit to the amount of  [money printing]-- he wouldn't say that, but he thinks the limit is so faraway you don't need to worry about it at all.

This doesn't mean Munger is anti-money printing. He also indicated he works from a Keynesian framework.

 We know you can't just start printing money to run the whole economy and stopping taxation. At some point on that road, you get a backlash, which causes anguish you don't want to get to. But how far you can go in having these Keynesian benefits and get by with it without risking that backlash, nobody knows for sure.

If you're like me, I believe in giving big trouble a wide berth, so I would try and stop a little short on this. Solving my problems by printing money.

So I guess in Munger's view the difference between Krugman and Munger is just a matter of degree, with Krugman just being more of a wild speculator than Munger.

(ht drewmx)